It was a smear job and they only backed down because they not only got called, on it, but got on it called publicly enough with enough fuss and pressure that it was not worth the trouble keep it up. It still shows a difference from U.S. media; people in hell will get ice water before any facet of the U.S. media backs down from their slanders of Noam over the years.
I wonder if Alterman, who revived the tired old "Noam is an island" pun to link to it, will have the decency to apologize too? Every time a liberal like Alterman or Brad De Long complains (justifiably) about the media, I remember how strongly many liberals (including specifically those two ) have applauded and joined in over the years when media did the same thing to leftists.